Merkel opens Davos with a reminder that the global economy is in dire need of repair

The World Economic Forum convened this year under the theme “The Great Transformation: Shaping new Models.” Angela Merkel described it in her opening speech as “too ambitious,” and that’s so true.

For 42 years, the forum has managed to attract the mighty and wealthy from all over the world to discuss the world’s challenges. But never have the challenges been as great as in the past few years. Since the 2008 financial crisis, the leaders have been gathering every January in Davos to “find solutions.” But that has yet to happen.

The organizers chose the theme of “transformation” this year because the old models of capitalism did not work, so new models were needed to fix the world’s problems. But pragmatic Chancellor Merkel, who gave the opening speech of the conference, knows that there are no quick fixes.

She emphasized her country’s commitment to a unified Europe, yet explained that Germany cannot make promises it cannot keep. It can’t stand behind every other European country, because if a market squeeze were to occur, it would not be able to fulfill that promise.

A couple of other themes prevail in this year’s agenda. The rise of Asia seems to be the new norm. Asian speakers have defended the region’s vulnerability to an expected recession in Europe by discussin the larger integration that is happening among Asian countries, and the new free trade agreements being signed among them. A hard landing for China seems to be off the cards for now, and growth is still expected to power along at around 8 percent.

Several sessions have been dedicated to the Arab Spring, one of them a televised panel led by Al-Arabiya. January 25 marked the one-year anniversary of the beginning of the uprising in Egypt. A year ago, participants at the forum were gathered around tablet computers in the halls watching with awe as Egyptians called for the fall of Mubarak’s regime. One year later, the mood is not as optimistic. The setbacks to the political transformation were larger than expected, and participants at the forum are eager to listen to the winners of the elections in the new democracies of North Africa explain their plans for the future.

Attending the forum’s sessions gives one the ability to listen and participate in stimulating discussions and constructive debate, along with a lot of networking, skiing, and fondue. But it’ll take a lot more than that to fix the state of the world.

(Nadine Hani is Senior Business News Presenter at Al Arabiya and can be reached at [e-mail] and on twitter @Nadine_bn.)